United Fire Group delivered its best nine-month earnings on record in 2026 and is on pace for one of its strongest full-year results in a decade. Inside those numbers, though, workers’ compensation is behaving in a way that independent agents placing commercial accounts with the Cedar Rapids carrier should track carefully.
Workers’ comp net written premium jumped 28% year-over-year to $23.3 million in the third quarter, making it UFG’s fastest-growing commercial line. The loss ratio for that same period came in at 79.3%, up from 69.6% in Q3 2025. That 9.7-point deterioration is the third consecutive quarter in which the loss ratio has worsened: 70.3% in Q1, 71.1% in Q2, now 79.3% in Q3. UFG is adding volume to workers’ comp at the same time as the loss experience is moving in the wrong direction, and doing so in a market where workers’ comp renewal rates have been negative all year.
Workers’ comp has been the softest pricing line in commercial insurance throughout 2026. Renewal rates across most commercial lines pulled back through the second quarter, with workers’ comp the lone line to remain in negative territory on a year-over-year basis. That trend held through Q3 as well, according to Ivans Index data.
The National Council on Compensation Insurance (NCCI) projected a net combined ratio for the full workers’ comp market of 91% to 96% for 2026, up from 91% in 2025 and 86% in 2024, as claim severity begins to absorb the gains that sustained a decade of underwriting profitability. AM Best, meanwhile, reported that mid-year 2026 direct incurred loss ratios for the line hit 52.3%, the highest in five years.
UFG’s 79.3% workers’ comp loss ratio sits well above the market’s mid-year figure. That gap reflects the mix of business UFG is writing, the growth in its book, and the absence of the favorable prior-year reserve development that had padded results in earlier periods. The 10-Q filings for Q1 and Q2 2026 each attributed workers’ comp loss ratio deterioration partly to less favorable prior-year reserve development, suggesting the cushion that helped earlier results is thinning.
Elsewhere, UFG’s results were solid, if softer than a year ago. The combined ratio increased 2.7 points to 94.6%, against a Q3 2025 that the company itself described as its best third-quarter result in nearly 20 years. The underlying combined ratio, which strips out catastrophes and reserve development, rose 1.6 points to 92.2%, driven by a 1.3-point increase in the underlying loss ratio. The comparable Q2 2026 underlying combined ratio of 92.6% now looks consistent with a gradual normalisation from the exceptional results UFG posted through 2025.
Net written premium grew 13% to $371.4 million in Q3, led by the core commercial book. Core commercial renewal pricing increased 2% in Q3, down from 4.3% in Q1 and 2.9% in Q2, reflecting the broader market softening. Net investment income rose 13% to $29.3 million, supported by fixed maturity portfolio growth and reinvestment at an average yield of 4.65%, up from 4.37% a year earlier.
On a nine-month basis, net income of $98.5 million is a record, up from $79.8 million in the same period of 2025. Return on equity improved to 14%, the company’s best over that period in roughly a decade.
UFG is distributed exclusively through approximately 850 independent agencies, and workers’ comp is frequently packaged alongside other commercial lines. Premium growth in the line may partly reflect the broader commercial book expansion - UFG wrote 13% more across commercial lines in Q3 - rather than a deliberate push into workers’ comp specifically. But the trajectory of the loss ratio suggests the rapid growth is not coming with equivalent underwriting selectivity, at least not yet.
President and CEO Kevin Leidwinger made no specific mention of workers’ comp in his prepared remarks, characterising overall performance as reflecting “the quality of the portfolio we have built by deepening our underwriting expertise, strengthening our distribution partnerships, expanding our capabilities and improving operational effectiveness.”
